Boral — FY2023 Earnings Presentation
42 slides from Boral's earnings presentation, Aug 10, 2023
Slide 1: Boral FY23 Results
Boral FY23 Results Twelve months ended 30 June 2023 10 August 2023 Presenters Vik Bansal CEO and Managing Director Belinda Shaw CFO
Slide 2: Disclaimer
Disclaimer Forward looking statements – This presentation contains certain forward-looking statements, including with respect to the financial condition, results of operations and businesses of Boral Limited (“BLD”) and certain plans and objectives of the management of BLD. Forward-looking statement
Slide 3: Agenda
Agenda Our Business Our Network Scale and scope 5 Cement 19 Integrated network 6 Quarries 20 Industry value drivers 7 Concrete 21 Asphalt 22 Recycling and Concrete Placing 23 Performance Overview Strategy Update Safety 9 Initiatives Update – PEMAF Pillars 25 FY23 Highlights 10 Environment & Sustaina
Slide 4: Our Business
Our Business Montrose Quarry, VIC
Slide 5: Scale and scope
Scale and scope Australia’s largest integrated construction materials company with a rich legacy and significant social contribution A rich legacy founded in 1946 Large integrated network provides a competitive advantage ~360 operating sites1 Strategy focused on strengthening and growing the c
Slide 6: Integrated network
Integrated network Valuable upstream and downstream operations with market leadership positions ~50% of Upstream volumes supplied to downstream operations >90% of Downstream businesses source their raw material inputs internally Vertical integration delivers: o Secure source of key materials o
Slide 7: Industry value drivers
Industry value drivers Strengthening key value drivers will create the platform for business and earnings growth Strategy Alignment Opportunity P E M A F • Degree of vertical integration between upstream and downstream assets within a region Integrated network • Securing positions to leverage strate
Slide 8: Performance Overview
Performance Overview Widemere Recycling, NSW
Slide 9: Safety and People update
Safety and People update TRIFR improvement of 47% equates to 83 fewer people injured than previous 12 months Safety performance Total recordable injury frequency rate (TRIFR)* >7,500 employees and contractors - 47% 8.7 years average tenure 13.73 14% women represented 11.50 9.81 27% women in executiv
Slide 10: FY23 Highlights
FY23 Highlights Twelve months ended 30 June 20231 Revenue Operational ▲17.1% Significant improvement across all key metrics 2023 $3,461m Challenging cost environment offset in part by price, improved cost 2022 $2,956m discipline with cost base adjustments EBIT margin 2H FY23 of 7.7% is up 200b
Slide 11: FY23 Financials
FY23 Financials Twelve months ended 30 June 2023 FY23 FY22 A$m FY23 FY22 continuing ops. continuing ops. FY23 FY22 Underlying1 Underlying1 Change Statutory2 Statutory2 Statutory Statutory3 Net Revenue 3,460.6 2,955.9 17.1% 3,460.6 2,955.9 3,460.6 3,908.2 EBITDA 454.4 330.2 37.6% 476.2 255.5 465.3 1,
Slide 12: Financial Performance
Financial Performance FY23 earnings has recovered from FY20 to FY22 decline Net revenue ($m) EBITDA1 ($m) EBIT1 ($m) 523 340 Property Property 454 427 232 207 389 183 3,461 3,241 490 330 307 3,131 455 112 2,924 2,956 233 372 365 159 152 324 106 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19
Slide 13: Market Performance – Volumes
Market Performance – Volumes Volume recovering the FY20-FY22 decline, shift in market segments in FY23 visible BORAL revenue by segment BORAL Volume trends – year-on-year growth in all segments 2021 – 2023 (% of total) ~7% ~5% ~13% ~6% ~7% 2 2 2 Other 11 12 13 Alterations & Additions 000’s cubic met
Slide 14: Price & Costs
Price & Costs Price traction offsetting some of the inflationary pressures PRICE – FY23 year on year growth in all segments BORAL Price trends* Long overdue pricing traction in all products and regions ~11% ~8% ~17% ~12% ~6% Focus on targeting and aligning sales segmentation/shape to deliver bet
Slide 15: Capital Expenditure
Capital Expenditure Capital expenditure of $223m is ~100% of depreciation & amortisation, 6.4% of revenue as committed Capex of $223m, down 29%, includes $209m of capital spend and $14m of lease additions - keeping cash capex spend below or close to D&A Key projects include completion of the Gee
Slide 16: Cash flow
Cash flow Continuing Operations Continuing Operations $m FY23 FY22 Operating cash flow from continuing operations of $358.7 million, an increase of Underlying EBIT 1 231.5 112.2 $142.0 million primarily driven by improved EBIT performance and lower Add: depreciation and amortisation 222.9 218.0 in
Slide 17: Balance Sheet
Balance Sheet A$m 30 June 2023 30 June 2022 Assets Reduction in cash and debt liabilities in FY23 driven by the debt reduction Cash 658.1 1,107.1 measures taken in FY23, which resulted in the repayment of $629 million Receivables 569.3 537.0 Inventory increase in FY23 relates to higher quarry st
Slide 18: Our Network
Our Network Melbourne Asphalt, VIC
Slide 19: Cement & Lime
Cement & Lime Boral’s upstream Cement operations manufacture clinker using its own limestone, import clinker and supply supplementary cementitious materials including fly ash and slag Significant supply ability and capacity across key east coast regions - up to 4 million tonnes of cement pa Oper
Slide 20: Quarries
Quarries Boral’s upstream Quarries include hard rock and sand operations supplies to our downstream Concrete and Asphalt operations and customers Significant supply capacity across key market segments in major population centres facilitating a full range of quarry products 1 Prized strategic ass
Slide 21: Concrete
Concrete Boral’s downstream concrete operations deliver sophisticated solutions for customers through its extensive network. Customer proximity is key Proven deep technical capability, high strength and speciality mixes to customers across residential, commercial, industrial, road and infrastructu
Slide 22: Asphalt
Asphalt Boral’s asphalt produce, supply and spray seal through its extensive national network of assets Operational reach spanning 41 sites, covering asphalt manufacturing, spray seal and contracting depots Significant supply capacity across key market segments. ~2 million tonnes per annum of as
Slide 23: Recycling and Concrete Placing
Recycling and Concrete Placing Boral’s Recycling and Concrete Placing operations are critical extensions in our vertically integrated business Boral Recycling operations extends Quarry life Boral Concrete Placing operations One of the largest construction and A significant history in concrete pl
Slide 24: Strategy Update
Strategy Update DMG Sydney Concrete Placing, NSW
Slide 25: PEMAF Pillars
PEMAF Pillars How we think about ‘PEMAF’ is the way we run our business every day… Our Boral Way People Environment • Relentless focus on safety, • Clarity on decarbonisation leadership and culture pathway • Embedding operating • Improving environmental model, leveraging scale, stewardship agility a
Slide 26: Environment
Environment ~80% of our Scope 1 and 2 emissions are result of cement manufacturing in NSW. Total CO2 emissions by business by key drivers NSW Cement manufacturing Process emissions - calcination Scope 1 / 2 20% 2% 78% 13% 18% 26% 43% 1,763kt Scope 1 / 2 Scope 1 / 2 Scope 3 Scope 3 21% 14% 21% 19% 25
Slide 27: Environment
Environment We have made good progress on decarbonisation and broader sustainability initiatives in FY23 Renewable energy solar Power Purchase Agreement (PPA) in place with delivery beginning in FY25 Expanding Alternative fuels with upgrade investment well progressed, delays in regulatory approval p
Slide 28: Environment
Environment Engagement with local policy makers ensuring alignment to Safeguard Mechanism and urgent need for CBAM. Safeguard Mechanism (SGM) SGM commenced in 2016, legislated framework that limits the emissions of ~215 large industrial facilities (>100ktpa CO2e), covers ~28% of national emissions
Slide 29: Environment
Environment We are transitioning our decarbonisation targets to align with local policy and globally recognised pathways for the cement industry Scope 1 / 2 Targets Transitioning our targets million tonnes CO2 New targets We remain committed to the ambition of net zero by 2050 Previous targets W
Slide 30: Assets
Assets Consistent work to upgrade/extend upstream and downstream positions to maintain leadership Cement Quarries Geelong VIC cement facility operational Acquired Dunmore hard rock reserves NSW Tarong QLD fly ash facility operational Acquired Hillview sand Vic Berrima NSW chlorine bypass upgrade for
Slide 31: Property
- Building something great Petrie Quarry, QLD 'S
Slide 32: Property
Property Applying a fixed asset lifecycle approach to property and the large portfolio of surplus property Construction Materials segment Property segment Includes earnings from optimisation initiatives on land that is or Earnings from repurposing of property that will never will possibly be used fo
Slide 33: Major surplus properties – opportunities secured
Major surplus properties – opportunities secured 20 year development agreement with Site rezoned Mirvac for 338 ha of land signed in 2018 Development underway and sales occurring Boral retains ownership of land which will support ~3,000 dwellings on Boral’s land, ~$10 million p.a. EBIT in
Slide 34: Major surplus properties – opportunities in progress
Major surplus properties – opportunities in progress Waurn Ponds Western Sydney Lakes Bombo Deer Park 12 km south west of Geelong 52km west of Sydney’s CBD 2 km north of Kiama NSW South Coast 17km west of CBD, VIC Cement operations ceased in Mar-22 40% owned, in JV with Holcim and 46 ha former
Slide 35: Priorities and Outlook
Priorities and Outlook Enfield Concrete, NSW
Slide 36: FY24 Priorities and Outlook
FY24 Priorities and Outlook Consistency in focus and direction with a strategic pathway to double digit earnings FY24 Priorities: Safety remains our highest priority, building on improvements in FY23, performance gaps to industry benchmarks remain, we will capture learnings from our better perform
Slide 37: Questions
Questions Peppertree Quarry, NSW
Slide 38: Appendices
Appendices Geelong Cement, VIC
Slide 39: Performance overview – Capital Structure and Debt
Performance overview – Capital Structure and Debt $m 30 June 2023 30 Jun 2022 Debt maturity profile, 30 June 20231 ($m) Leases 122.4 119.7 USPP Notes 585.9 563.2 144A/ Reg S 288.0 900.6 75 Undrawn Gross Debt1 996.3 1,583.5 Drawn Cash and cash equivalents 658.1 1,107.1 Net Debt per balance sheet 338.
Slide 40: Statutory Financial Reconciliation
Statutory Financial Reconciliation FY23 FY22 Before After Before After Significant Significant significant Significant significant significant items items A$m items items items items Sales revenue Continuing operations 3,460.6 3,460.6 2,955.9 2,955.9 Discontinued operations 952.3 952.3 Total 3,460.6
Slide 41: Significant Items
Significant Items Twelve months ended 30 June 2023 A$m FY23 Divestment related matters (10.9) Restructure and onerous contracts 8.4 Divestment related matters primarily relates to completion settlements and other items US senior notes tender offer 11.2 Restructure and onerous contracts primarily
Slide 42: BORAL
BORAL Building something great